Top UK Firms Hold Line on Profits While Revenues Fall

LONDON - City elite keep profits on course in 2009-10 despite falls in revenue

Freshfields Bruckhaus Deringer has unveiled an 11.3% drop in revenue for the 2009-10 financial year, becoming the latest magic circle firm to post declining fee income in the uncertain market.

Turnover at the City giant has fallen to £1.14bn for the past financial year, compared to £1.29bn in 2008-09. The results mean the City's four largest firms have all seen a decrease in their top line over the last year.

Freshfields has also seen a drop in profits per equity partner (PEP), which edged down 2.6% to £1.41m, compared to £1.44m last year.

However, the results still place Freshfields at the top of the pack for average partner profits, with Allen & Overy's (A&O's) PEP rising 10% to £1.1m and Linklaters partners taking home an average of £1.2m after a 6.8% drop.

Clifford Chance's (CC's) PEP rose by 27% over the year to £933,000, after profits fell by over a third during 2008-09 to £733,000. Turnover fell by just 5% to £1.197bn during 2009-10, placing the firm at the top of the UK rankings by revenue.

Freshfields chief executive Ted Burke commented: "We expected last year to be a challenging one and we were not surprised to see our revenues impacted. But we have had a very good share of the most interesting work and are generally happy with our results."

Burke pointed to restructuring and litigation as strongly performing practices. Geographically, he highlighted the firm's China and US practices, which made a comeback after tough trading during the first part of the year.

The results mean that in revenue terms, CC and Linklaters lead the way, with the former's income dropping by around 5% from £1.26bn in 2008-09, while the latter's now stands at £1.18bn. A&O's fee income dropped 4% to £1.05bn.

A&O senior partner David Mo ...